The company has now executed a formal acquisition and joint venture agreement with Angka Alamjaya Sdn Bhd (AASB) to recommission the Lubuk Mandi Gold Mine in Peninsular Malaysia.
Lubuk Mandi is located near the State capital of Terengganu Malaysia.
There is the potential for early cashflows from the re-treatment of one million+ tonnes of tailings, as a prelude to hard rock mining.
GBM and AASB plan to develop the Lubuk Mandi Gold Mine and recommence mining operations, with the GBM board approving the transaction.
In June GBM Resources entered into a binding term sheet to undertake a share swap with AASB, in which GBM will acquire around 40% of AASB by issuing 15% of ordinary shares in GBM.
The exploration target for the Lubuk Mandi project is estimated to contain between 174,000 and 443,000 gold ounces, with the development plan to focus on the retreatment of the tailings dam followed by the recommencement of hard rock mining.
At the time of signing the term sheet last month GBM's managing director, Peter Thompson, commented: "We are delighted with having the opportunity to develop and explore the Lubuk Mandi Gold Mine with AASB.
"Our strategy is well supported by our major Singaporean shareholders and is in line with our business objective of delivering shareholder value via project generation."
- Approval of the transaction by GBM shareholders at a general meeting on Monday 22nd July 2013; and
- Procuring project funding of up to SGD$6 million for AASB.
The Lubuk Mandi Gold Mine was previously owned and operated by the government body the Terengganu State Economic Development in the 1990's and produced 108,000 ounces of gold from two shallow pits.
The associated processing plant is rated at 300,000 tpa and involves single stage crushing to a stockpile and mill, with the mine and processing plant on care and maintenance since 2000.
Exploration target, potential early cashflows
The total JORC exploration target for the project is estimated to contain between 174,000 and 443,000 ounces of gold, with the project covering 221 hectares and includes over a million tonne of tailings which has the potential for early gold production and provides development funding options.
- Tailings Dam - exploration target between 1Mt at 0.7 g/t Au containing 23,000 oz Au, and 1.4Mt at 0.9 g/t Au containing 38,000 oz Au.
- Main Zone - exploration target between 370,000 tonnes averaging 2.9 g/t Au containing 35,000 oz Au and 1,100,000t averaging 3.6 g/t Au containing 127,000 oz Au.
- East Zone - exploration target between 1,440,000 tonnes averaging 2.5 g/t Au containing 116,000 oz Au and 2,400,000 tonnes averaging 3.6g/t Au containing 278,000 oz Au.
With an Exploration Target of between 174,000 and 443,000 ounces of gold and early start to mining through the treatment of tailings at the Lubuk Mandi Gold Mine, GBM is upping the ante and has the potential to generate early cashflows,
To date, $1 million has been raised in a placement and an entitlement issue will seek to raise additional funds.
To tap Asian markets there is also a plan to complete an Initial Public Offering on the Singapore Stock Exchange during 2014.
The GBM board has approved the transaction and is preparing for an ongoing plan to develop the Lubuk Mandi Gold mine and recommence mining operation.